Troubled German car parts supplier Schaeffler has pawned its own operating business to its lenders, Financial Times Deutschland reported.
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Last week the Schaeffler owner family reached an agreement with the banks, which it owes EUR12bn. Details were not known, apart from the fact that the lenders had demanded higher interest rates. Now it turns out the family-owned company has had to make far greater concessions than expected. Schaeffler had already pawned its 90% stake in larger rival Continental to the banks.
It was agreed that the debt may be repaid by selling the Continental shares, if needed. It is therefore unclear how large a shareholding Maria-Elisabeth Schaeffler and her son Georg will hold in the merged Continental-Schaeffler group.
The merger will be conducted in accordance with the four-phase model of the “Project Fairplay” developed by consultancy agency Roland Berger. The first three phases concern the revamp of Schaeffler’s structure and are to be finalised by June 2010. The fourth phase concerns the merger of Schaeffler and Continental’s operating businesses and has no deadline.
Friday meeting to discuss Schaeffler/Conti fate
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